BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Halliburton wins ruling against BP over Gulf oil spill


NEW ORLEANS (Reuters)—A federal judge on Tuesday said Halliburton Co. is not liable for some pollution claims arising from the 2010 Gulf of Mexico oil spill, setting back BP P.L.C.'s effort to hold other companies responsible for part of the $42 billion cleanup.

U.S. District Judge Carl Barbier in New Orleans said BP must indemnify Halliburton, which provided cementing services for the Macondo oil well, for third-party compensatory claims under their contract, even if Halliburton is found grossly negligent.

The indemnification relates to claims arising from pollution or contamination that did not originate from Halliburton property located above the land or water.

Halliburton would still be responsible for punitive damages, as well as civil fines under the federal Clean Water Act.

"This is a very positive step for Halliburton, however outstanding issues still remain," wrote Angie Sedita, a UBS Securities L.L.C. analyst who has a "buy" rating on that company. "The claim of fraud against Halliburton and thus a breach of contract does appear to leave an open issue in the court's eyes."

Judge Barbier issued a similar ruling on Jan. 26 that required BP to indemnify Transocean Ltd., which owned the Deepwater Horizon drilling rig, on compensatory damages claims.

That ruling meant BP could not shift more than $15 billion of costs for the spill.

BP spokesman Daren Beaudo said the Halliburton decision sends a "strong signal" that contractors involved in critical well operations will be held accountable. He said it means BP's indemnity "could be void" if Halliburton committed fraud.

The company added that it has paid out $7.8 billion so far related to the spill, and that "our charges and provisions never assumed any recovery from Transocean or Halliburton for pollution-related damages."

Halliburton spokeswoman Beverly Stafford said that company agrees with Tuesday's decision "to the extent that it requires BP to honor its contractual indemnity obligations."

Judge Barbier oversees multidistrict litigation over the April 20, 2010, explosion of the Deepwater Horizon.

The accident caused 11 deaths and the largest offshore oil spill in U.S. history. Judge Barbier has set a Feb. 27 start date for a bench trial to apportion blame.

Halliburton is based in Houston, and BP in London.

Halliburton shares closed up 11 cents at $36.78, and BP's American depositary receipts rose $1.77, or 4%, to $45.91.

The case is In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.

Read Next

  • BP may agree to $25B oil spill payout: Analyst

    LONDON (Reuters)—BP P.L.C. is likely to agree next month to pay $20 billion to $25 billion to settle all charges around the Gulf of Mexico oil spill, according to a leading analyst, double the figure the company has set aside and more than other analysts expect.